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CONCEPTUALISING &
INITIALISING THE IT PROJECT
Session 02
Figure 2.1
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Information Technology Project
Methodology (ITPM)
• Methodology
– A strategic-level plan for managing and controlling the
project
– Game plan for implementing project and product
lifecycles
– Recommends phases, deliverables, processes, tools,
and knowledge areas for supporting an IT project
– Must be flexible and include “best practices” learned
from experiences over time.
• Can be
– Traditional (e.g., Waterfall)
– Agile (e.g., XPM, SCRUM)
Phases
• Phase 1: Conceptualize and Initialize.
– Define the Project Goal
– Be clear about initial scope
– Create the Business Case
• Phase 2: Develop the Project Charter and Detailed
Project Plan defined in terms of project’s:
– scope
– schedule
– budget
– quality objectives
Phases continued
Figure 2.3
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Developing the Business
Case
• Step 1: Select the Core Team
• Advantages:
• Credibility
• Alignment with organizational goals
• Access to the real costs
• Ownership
• Agreement
• Bridge building
Developing the Business
Case
Organizational Drives
Vision & Mission
Drives
Organizational
Strategy
Supports
Project’s
Organizational
Measurable
Supports Value
(MOV)
Figure 2.4
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Process for Developing the
MOV
1. Identify the desired area of impact
Potential Areas:
• Strategic
• Customer
• Financial
• Operational
• Social
Process for Developing the
MOV
Process for Developing the
MOV
2. Identify the desired value of the IT project
Organizational Value:
• Better?
• Faster?
• Cheaper?
• Do More? (growth)
Process for Developing the
MOV
3. Develop an Appropriate Metric
Should it increase or decrease?
Metrics:
• Money ($, £, ¥ )
• Percentage (%)
• Numeric Values
Process for Developing the
MOV
4. Set a time frame for achieving the MOV
When will the MOV be achieved?
Process for Developing the
MOV
5. Verify and get agreement from the project
stakeholders
Project manager and team can only guide
the process
Process for Developing the
MOV
6. Summarize the MOV in a clear, concise
statement or table
= $100,000
$20,000
= 5 years
Developing the Business
Case
– Break Even
Total $25.00
If you sell a golf putter for $30.00 and it costs $25.00 to make, you have
a profit margin of $5.00:
– Return on Investment
Project ROI =(total expected benefits – total expected costs)
total expected costs
= ($115,000 - $100,000)
$100,000
= 15%
Developing the Business
Case
– Net Present Value
Year 0 Year 1 Year 2 Year 3 Year 4
Where:
I = Total Cost or Investment of the Project
r = discount rate
t = time period
Developing the Business
Case
ROI 15% 2 4 10
Financial Payback 10% 3 5 10
NPV 15% 2 4 10
Alignment with
10% 3 5 8
strategic objectives
Organizational Likelihood of achieving
project’s MOV 10% 2 6 9
Availability of skilled
team members 5% 5 5 4
Project Maintainability 5% 4 6 7
Time to develop 5% 5 7 6
Risk 5% 3 5 5
Customer satisfaction 10% 2 4 9
External
Increased market share 10% 2 5 8
Notes: Risk scores have a reverse scale – i.e., higher scores for risk imply lower levels of risk
Developing the Business
Case
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Project Selection and
Approval
• The IT Project Selection Process
• The Project Selection Decision
– IT project must map to organization goals
– IT project must provide verifiable MOV
– Selection should be based on diverse
measures such as
• tangible and intangible costs and benefits
• various levels throughout the organization
Business Case Template
Figure 2.5
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